Isssue Date
Septem
mber 30, 20088
A
Audit Report Num
mber
2008-PH-1014
TO: Jamess D. Cassidyy, Director, Office
O of Pubblic Housingg, Pittsburgh Field Officee,
3EP
PH
FROM: John P.
P Buck, Reggional Inspector Generall for Audit, Philadelphia
P a Regional
Officce, 3AGA
SUBJEC
CT: The Housing
H Authhority of thee City of Pittsburgh, Pennnsylvania, Did
D Not
Adeequately Adm
minister Its Housing
H Asssistance Paym
ments for Leeased Housinng
HIGH
HLIGHT
TS
What We
W Audited
d and Why
We au udited the Hoousing Authhority of the City of Pittssburgh’s (Auuthority)
adminnistration of its housing assistance
a paayments for leased housing under itss
Movin ng to Work Demonstrati
D ion program agreement based
b on ourr analysis off
variouus risk factorrs relating too housing auuthorities adm
ministering a leased houssing
prograam within ouur region. This
T is the firrst of two auudit reports we
w plan to isssue
on thee Authority’ss program. The T audit obbjective addrressed in thiss report was to
determ
mine whetheer the Authorrity properlyy maintainedd documentattion to suppoort
housinng assistancee payments and a accurateely calculated them.
What We
W Found
The Authority
A didd not properlly maintain documentati
d on to supporrt housing
assistaance paymennts and did not
n always acccurately caalculate houssing assistancce
paymeents for its leeased housinng. We idenntified deficiencies in 28 of the 30 tenant
files th
hat we revieewed. The Authority
A didd not maintaiin complete documents
requirred by the U.S. Departm ment of Housiing and Urbaan Developm ment (HUD)) and
its ow
wn administraative plan, reesulting in unsupported
u h
housing assiistance paym
ments
of $58,470. It also made ineligible housing assistance payments totaling $12,180
because it did not execute housing assistance payments contracts within 60 days
of the beginning of the lease term, and it made housing assistance payments
before the effective date of the related housing assistance payment contract.
Lastly, the Authority inaccurately calculated housing assistance payments,
resulting in $4,811 in overpayments and $1,708 in underpayments.
What We Recommend
We recommend that HUD require the Authority to correct the errors in the tenant
files identified by the audit, provide documentation to support housing assistance
payments totaling $58,470 or reimburse its leased housing program for the
payments that it cannot support, reimburse its leased housing program $16,991 for
the ineligible payments and overpayments, and reimburse applicable tenants
$1,708 for the housing assistance underpayments.
For each recommendation without a management decision, please respond and
provide status reports in accordance with HUD Handbook 2000.06, REV-3.
Please furnish us copies of any correspondence or directives issued because of the
audit.
Auditee’s Response
We provided our discussion draft audit report to the Authority on July 30, 2008.
We discussed the report with the Authority during the audit and at an exit
conference on August 7, 2008. Following the exit conference, we provided an
updated draft to the Authority on August 14, 2008. The Authority provided
written comments to our draft report on August 22, 2008. The Authority
disagreed with some of the conclusions in the report and reimbursement of any
ineligible costs, but it stated that it has developed and is implementing policies
and procedures to address the deficiencies that we identified. The complete text
of the Authority’s response, along with our evaluation of that response, can be
found in appendix B of this report.
2
TABLE OF CONTENTS
Background and Objectives 4
Results of Audit
Finding: The Authority Did Not Adequately Administer Its Leased Housing 5
Assistance Payments in Accordance with HUD Requirements
Scope and Methodology 9
Internal Controls 11
Appendixes
A. Schedule of Questioned Costs and Funds to Be Put to Better Use 13
B. Auditee Comments and OIG’s Evaluation 14
C. Criteria 30
D. Results of Tenant File Reviews 34
E. Housing Assistance Payment Errors 35
3
BACKGROUND AND OBJECTIVES
The Housing Authority of the City of Pittsburgh (Authority) was established as a public
corporation in 1937 under the Housing Authority Law of the Commonwealth of Pennsylvania to
provide decent, safe, and sanitary housing in the most efficient and economical manner. A
seven-member board of commissioners governs the Authority. The mayor of the City of
Pittsburgh appoints the members of the board. The board appoints an executive director to
administer the affairs of the Authority. The current executive director is A. Fulton Meachem, Jr.
The Authority’s main administrative office is located at 200 Ross Street, Pittsburgh,
Pennsylvania.
In 1996, Congress authorized Moving to Work as a U.S. Department of Housing and Urban
Development (HUD) demonstration program. Congress exempted the participants from many of
the Housing Act of 1937 and associated regulations as outlined in the individual Moving to
Work agreements that HUD established with the program’s participants. In October 1998, the
language in the Departments of Veterans Affairs and Housing and Urban Development and
Independent Agencies Appropriations Act of 1999 (Public Law 105-276, 112 Stat. 2461)
specifically named and authorized the Authority to join the demonstration program. In
November 2000, HUD signed a five-year Moving to Work agreement with the Authority. In
April 2005, HUD agreed to extend the term of the Authority’s Moving to Work agreement for
one year. In December 2006, HUD agreed to extend for three years the term of the Authority’s
Moving to Work agreement. The expiration date of the Authority’s current agreement is
December 31, 2009.
Under the Section 8 Housing Choice Voucher program, the Authority was authorized to provide
leased housing assistance payments to more than 7,000 eligible families. HUD authorized the
Authority the following financial assistance for housing choice vouchers:
Authority fiscal year Annual budget authority
2005 $34,714,733
2006 $35,828,080
2007 $34,991,503
Totals $105,534,316
Our audit objective was to determine whether the Authority properly maintained documentation
to support housing assistance payments and accurately calculated them.
4
RESULTS OF AUDIT
Finding: The Authority Did Not Adequately Administer Its Leased
Housing Assistance Payments in Accordance with HUD Requirements
The Authority did not properly maintain documentation to support housing assistance payments
and did not always accurately calculate housing assistance payments for its leased housing in
compliance with HUD requirements. This condition occurred because the Authority did not
implement quality control procedures to ensure that it followed HUD requirements. As a result,
it was unable to support $58,470 in housing assistance payments and improperly overpaid
$16,991 and underpaid $1,708 in housing assistance.
The Authority Lacked Proper
Documentation in Its Tenant
Files and $58,470 of Payments
Were Unsupported
The Authority lacked proper documentation to support housing assistance
payments totaling $58,470 for the period September 2005 through December
2007. Our review of 30 tenant files showed that 28 files had at least one of the
following key documents missing or incomplete:
• 27 files did not have fully executed housing assistance payments contracts
(signed but not dated by the Authority, the owner, or both),
• 18 files did not have a signed and/or dated lease,
• 10 files did not have leases executed before the beginning of the lease
term,
• Six files did not have a completed request for tenancy approval,
• Five files did not have evidence of an adequate rent reasonableness
review,
• Five files either did not have an Authorization for Release of
Information/Privacy Act Notice (HUD Form 9886) or the form was
incomplete,
• Three files did not have proper income verification,
• Three files either did not have a lead-based paint certification or the
certification was not signed by the tenant,
• One file did not have an interim reexamination completed as required, and
• One file did not have a completed criminal background check.
The files reviewed did not include complete documentation required by HUD and
were not consistent with the Authority’s administrative plan. Although the
5
majority of the deficiencies are in essence documentation issues, there were
instances in which incomplete documentation or the lack of documentation was
material and resulted in the Authority making unsupported housing assistance
payments of $58,470. We conservatively determined that the Authority made
unsupported payments of
• $41,258 in 6 of the 27 files in which the housing assistance payment
contract was not signed,
• $13,954 in the three files that lacked third party verification of income,
and
• $3,258 in three of the five files that had inadequate rent reasonableness
reviews.
Appendix D of this report shows the detailed results of our tenant file reviews.
The Authority Made Ineligible
Housing Assistance Payments
The Authority also made ineligible housing assistance payments totaling $12,180
in 4 of the 30 tenant files reviewed. It made $10,971 in ineligible payments
because it did not execute the housing assistance payments contract within the
required period of 60 days from the beginning of the lease term. HUD regulations
require the contracts to be executed no later than 60 calendar days from the
beginning of the lease term. Any contract executed after the 60 day period is void
and the Authority may not pay any housing assistance payment to the owner.
This condition occurred in four files that we reviewed. The Authority made
another $1,209 in ineligible payments because it made the payments before the
effective date of the housing assistance payments contract. HUD regulations
prohibit the Authority from making any assistance payment to the owner until the
housing assistance payment contract has been executed. This condition occurred
in one file1 that we reviewed.
Appendix D of this report shows the detailed results of our tenant file reviews.
The Authority Incorrectly
Calculated Housing Assistance
Payments
The Authority incorrectly calculated housing assistance payments, resulting in
overpayments of $4,811 and underpayments of $1,708 for a total difference of
$6,519 for the period September 2005 through December 2007. To determine
1
One file (tenant 26) had total ineligible costs of $2,015 related to deficiencies with housing assistance payment
contracts ($806) and early payments ($1,209).
6
whether the Authority correctly calculated the housing assistance payments, we
reviewed 59 annual reexaminations from 30 tenant files. The Authority
incorrectly calculated housing assistance payments in 10 of the 30 tenant files
reviewed. The Authority made these errors because it did not
• Retroactively adjust housing assistance payments based on an increase in
tenant income (one file, $3,339 overpayment),
• Include child support payments in the income calculations and did not
properly calculate other income and wages (one file, $1,140
overpayment),
• Properly include unemployment compensation and a related dependent
allowance in the income calculations (one file, $140 overpayment),
• Properly calculate medical assistance (one file, $120 overpayment),
• Properly calculate a medical deduction (one file, $72 overpayment), and
• Properly calculate medical expense deductions and tenant income (five
files, $1,708 underpayments).
Appendix E of this report shows the housing assistance payment errors that
resulted from the Authority’s incorrect calculations.
The Authority Needs to
Establish Quality Control and
Compliance Procedures
Although the problems discussed in this finding occurred mainly because of
administrative errors made by the Authority’s staff, the Authority’s lack of quality
control and compliance procedures contributed significantly to this situation. The
Authority did not perform supervisory quality control reviews to ensure that all
required documentation was properly maintained in its tenant files and did not
implement procedures and controls to ensure that it followed HUD requirements.
The Authority’s administrative plan stated that it was required to perform quality
control reviews for units under contract. However, the Authority acknowledged
that it had not performed quality control reviews before September 2007. It stated
that since September 2007, it had established a quality control and compliance
program and that it views this component of its operations as a continual process
that will be updated and enhanced as needs are identified. The Authority
indicated that it had made changes and implemented some controls and that it
planned to make additional changes and implement additional controls to improve
its leased housing program.
Conclusion
The Authority did not adequately administer its leased housing assistance
payments. As a result, it disbursed $58,470 in housing assistance payments
without proper documentation and overpaid $16,991 and underpaid $1,708 in
7
housing assistance. The Authority needs to implement adequate controls and
procedures to improve its administration of the program and ensure that it
complies with HUD requirements and its administrative plan.
Recommendations
We recommend that the Director of HUD’s Office of Public Housing,
Pittsburgh field office, direct the Authority to
1A. Correct the errors in the tenant files identified by the audit.
1B. Provide documentation to support housing assistance payments
totaling $58,470 or reimburse its leased housing program from
nonfederal funds for the payments that it cannot support.
1C. Reimburse its leased housing program $16,991 from nonfederal funds
for the ineligible housing assistance payments identified by the audit.
1D. Reimburse applicable tenants $1,708 from program funds for the
housing assistance underpayments.
1E. Improve its controls by implementing procedures to help reduce and/or
prevent recurring deficiencies in its payments calculation process,
ensure that housing assistance contracts and leases are executed as
required, and that assistance payments are made after contracts have
been properly executed.
1F. Develop and implement policies and procedures for performing quality
control reviews of files and documenting the results of those reviews
and any actions taken.
1G. Develop procedures for employees to adequately maintain all
supporting documentation in tenant files.
8
SCOPE AND METHODOLOGY
To accomplish our objective, we
• Reviewed applicable laws; regulations; the Authority’s administrative plan; HUD’s program
requirements at 24 CFR [Code of Federal Regulations] Parts 5, 35, and 982; HUD’s Public
and Indian Housing Notices 2004-01 and 2004-18; and HUD’s Housing Choice Voucher
Program Guidebook 7420.10G;
• Reviewed the Authority’s accounting records; annual audited financial statements for 2003,
2004, and 2005; check register; tenant files; computerized databases including housing
assistance payment register and HUD-50058 (Family Report) data; board meeting minutes;
organizational chart; correspondence; and Moving to Work documents including the
agreement, plans, and reports; and
• Reviewed HUD’s monitoring reports for the Authority.
We also interviewed the Authority’s employees and HUD staff.
To achieve our audit objective, we relied in part on computer-processed data in the Authority’s
database. Although we did not perform a detailed assessment of the reliability of the data, we
did perform a minimal level of testing and found the data to be adequate for our purposes.
We randomly selected files for 20 tenants receiving housing assistance payments during our
audit period from the Authority’s housing assistance payment register. The universe included
6,416 families that were receiving housing assistance payments. Additionally, we selected files
for 10 of 21 new tenants the Authority admitted to the program during the month of August
2007. Therefore, we reviewed 30 tenant files in total. As stated in the audit report, we identified
deficiencies in 28 tenant files that we reviewed and determined that the Authority made
ineligible housing assistance payments totaling $16,991 during the period from September 2005
to December 2007.
We analyzed an automated data file that the Authority provided containing family information
for all persons participating in its leased housing program as of August 2007. The Authority had
6,416 families in its data file. We screened the Social Security numbers for the heads of
household for the 6,416 families against a database provided to us by the Social Security
Administration to determine whether heads of household were deceased. We determined that
106 Social Security numbers for heads of household were associated with a deceased person and
14 had validation issues. We reviewed the tenant files for 10 of the 106, and 2 of the 14. We
identified only minor internal control issues relating to the Authority’s handling of these
situations, and we reported them to the Authority in a separate letter.
We performed our on-site audit work between September 2007 and June 2008 at the Authority’s
office located at 200 Ross Street, Pittsburgh, Pennsylvania. The audit covered the period
September 1, 2005, through August 31, 2007, but was expanded when necessary to include other
periods.
9
We performed our audit in accordance with generally accepted government auditing standards.
10
INTERNAL CONTROLS
Internal control is an integral component of an organization’s management that provides
reasonable assurance that the following objectives are being achieved:
• Effectiveness and efficiency of operations,
• Reliability of financial reporting, and
• Compliance with applicable laws and regulations.
Internal controls relate to management’s plans, methods, and procedures used to meet its
mission, goals, and objectives. Internal controls include the processes and procedures for
planning, organizing, directing, and controlling program operations. They include the systems
for measuring, reporting, and monitoring program performance.
Relevant Internal Controls
We determined the following internal controls were relevant to our objectives:
• Program operations – Policies and procedures that management has
implemented to reasonably ensure that a program meets its objectives.
• Validity and reliability of data – Policies and procedures that management
has implemented to reasonably ensure that valid and reliable data are
obtained, maintained, and fairly disclosed in reports.
• Compliance with laws and regulations – Policies and procedures that
management has implemented to reasonably ensure that resource use is
consistent with laws and regulations.
• Safeguarding resources – Policies and procedures that management has
implemented to reasonably ensure that resources are safeguarded against
waste, loss, and misuse.
We assessed the relevant controls identified above.
A significant weakness exists if internal controls do not provide reasonable
assurance that the process for planning, organizing, directing, and controlling
program operations will meet the organization’s objectives.
11
Significant Weakness
Based on our audit, we believe the following item is a significant weakness:
• The Authority did not establish and implement adequate controls to ensure
that assistance payments were properly supported and the accuracy of
housing assistance payments.
12
APPENDIXES
Appendix A
SCHEDULE OF QUESTIONED COSTS
AND FUNDS TO BE PUT TO BETTER USE
Recommendation Funds to be put
number Ineligible 1/ Unsupported 2/ to better use 3/
1B $58,470
1C $16,991
1D $1,708
1/ Ineligible costs are costs charged to a HUD-financed or HUD-insured program or activity
that the auditor believes are not allowable by law; contract; or federal, state, or local
policies or regulations.
2/ Unsupported costs are those costs charged to a HUD-financed or HUD-insured program
or activity when we cannot determine eligibility at the time of the audit. Unsupported
costs require a decision by HUD program officials. This decision, in addition to
obtaining supporting documentation, might involve a legal interpretation or clarification
of departmental policies and procedures.
3/ Recommendations that funds be put to better use are estimates of amounts that could be
used more efficiently if an Office of Inspector General (OIG) recommendation is
implemented. This includes reductions in outlays, deobligation of funds, withdrawal of
interest subsidy costs not incurred by implementing recommended improvements,
avoidance of unnecessary expenditures noted in preaward reviews, and any other savings
which are specifically identified. The funds to be put to better use in this report represent
funds that tenants overpaid due to the Authority’s calculation errors.
13
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Ref to OIG Evaluation Auditee Comments
14
Comment 1
Comment 2
Comment 3
Comment 4
Comment 5
15
Comment 4
Comment 6
Comment 6
Comment 7
16
Comment 7
Comment 7
Comment 8
17
Comment 8
Comment 9
Comment 9
18
Comment 10
Comment 10
Comment 11
Comment 12
19
Comment 13
Comment 13
Comment 14
20
Comment 14
Comment 15
Comment 15
Comment 16
21
Comment 16
Comment 17
Comment 18
Comment 16
22
23
24
OIG Evaluation of Auditee Comments
Comment 1 The conclusions in the audit report are supported by audit work performed in
accordance with generally accepted government auditing standards and support
the finding.
Comment 2 The Authority’s response included a report from a consultant hired by the
Authority to review our audit findings. The consultant’s report was dated June
11, 2008, but was not furnished to us until two months later, when the Authority
provided its formal response to our draft report. The consultant’s report was
based on preliminary findings that we communicated to the Authority as the audit
progressed. We did not include the consultant’s report because the report
contained language restricting its use. The Authority’s response incorporated the
consultant’s analysis and we, in turn, considered the consultant’s analysis in our
comments to the Authority’s written response. (See Comments 4, 6, 13, 14 and
15) We also revised the report and appendix D to show that the majority of the
deficiencies were documentation issues and we conservatively included in our
calculations of questioned costs only those instances where incomplete
documentation or the lack of documentation was material.
Comment 3 We revised the report to show that the majority of the deficiencies were
documentation issues and we conservatively included in our calculations of
questioned costs only those instances where incomplete documentation or the lack
of documentation was material.
Comment 4 HUD regulations at 24 CFR [Code of Federal Regulations] 982.305 (c) state that
the Public Housing Authority must use its best efforts to execute the Housing
Assistance Payment (HAP) contract before the beginning of the lease term. The
contract must be executed no later than 60 calendar days from the beginning of
the lease term. Any HAP contract executed after the 60 day period is void, and
the Public Housing Authority may not pay any housing assistance payment to the
owner. As stated in the report, in 27 files, the HAP contract was not dated by the
Authority, the owner, or both parties. Because dates were missing, we could not
determine whether the HAP contract was executed within 60 days of the
beginning of the lease term or not. We considered other documentation in the
tenant files as well as the Authority’s housing assistance payment register and
conservatively determined that payments totaling $41,258 were unsupported for
six tenants. In the six cases, the Authority made payments to the owners for three
and a half to six times the normal monthly assistance payment amount. This
gives indication that the contracts were not executed until more than 60 days after
the beginning of the initial term of the lease. Further, in two of the six cases, date
stamps on the back of the HAP contracts, documenting receipt by the Authority,
gave additional indication that the contracts were executed closer to the date of
the first payment to the owner (20 days and 17 days), rather than the effective date
of the lease term (134 days and 76 days).
25
We are encouraged by the Authority’s statement that it is developing and
implementing quality control procedures to ensure that all HAP contracts are
dated when signed.
Comment 5 Based on additional analysis that we performed as a result of the exit conference,
we revised the appendix in the report to show that 27 of the files we reviewed did
not have a fully executed housing assistance payments contract.
Comment 6 HUD regulations at 24 CFR 982.305 (b) state that the landlord and the tenant
must always execute the lease before the beginning of the initial term of the lease
for a unit. Because dates were missing, we could not determine whether the
leases were executed before the beginning of the lease or not. Regarding tenant
17, contrary to HUD regulations, the lease was not executed before the beginning
of the initial term of the lease. The beginning of the initial term of the lease was
July 16, 2004, and the owner and the tenant signed and dated the lease on July 30,
2004. Therefore, we revised our results to show that the lease was not signed
before the term of the lease rather than not being present, signed and dated.
Regarding tenant 2, contrary to HUD regulations, the lease was not executed
before the beginning of the initial term of the lease. The beginning of the initial
term of the lease was December 1, 2004, and the owner and the tenant signed and
dated the lease on February 21, 2005. Therefore, we revised our results and
removed the mark indicating that the lease was not present, signed and dated. We
revised the report to show that this deficiency was a documentation issue.
We are encouraged by the Authority’s statement that it is developing and
implementing quality assurance procedures to ensure that all leases are dated
when signed.
Comment 7 As stated in the audit report, our review of tenant files showed that key documents
were missing or incomplete. For tenants 23, 26, and 30, the rent comparability
forms were incomplete and the Authority did not provide any other
documentation to demonstrate that a rent comparison was conducted and that the
rent was reasonable for these units. Regarding tenant 7, rent reasonableness
certifications were in the file for the 2002, 2003 and 2004 rent increases.
Although the comparability forms supporting the 2002 and 2003 certifications
were not current, the comparables for the 2004 certification were current. Since
the most recent certification was acceptable, we removed the results for this
tenant from the report. We revised our results for tenant 19 because a rent
reasonableness review was not needed because there was no increase in rent. The
report now shows that five files lacked evidence of an adequate rent
reasonableness review.
Comment 8 The Authorization for Release of Information/Privacy Act Notice is a HUD form
(HUD Form 9886) and it includes space to identify the name of the Public
Housing Authority requesting the release of information, including the full
address, name of contact person, and date. As such, the Authority is required to
accurately and completely fill out the form. The Authority claims that the tenant
26
and the recipient of the form are made aware of the requestor through a cover
letter or otherwise, however, we found no evidence in the tenant files reviewed to
support the Authority’s claim. Further, a cover letter could easily become
separated from the form and as a result, the recipient would not have any
information regarding the party requesting the information. We revised the report
to show these deficiencies as documentation issues.
We are encouraged by the Authority’s statement that it is developing and
implementing additional quality assurance procedures to ensure that it will
completely fill out Authorization for Release of Information/Privacy Act Notices.
Comment 9 The Request for Tenancy Approval is a HUD form (form HUD-52517). HUD’s
Housing Choice Voucher Program Guidebook, 7420.10G, section 8.7, states that
Public Housing Authorities must use the form for requesting tenancy approval.
Further, the Authority’s administrative plan requires that the Request for Tenancy
Approval be signed by both the tenant and the owner. Our results showed that
three forms lacked a date and three forms lacked a required signature. We revised
the report to show these deficiencies as documentation issues.
We are encouraged by the Authority’s statement that it is developing and
implementing additional quality assurance procedures to ensure that Requests for
Tenancy Approval are dated when signed.
Comment 10 HUD regulations at 24 CFR 35.92 addressing lead-based paint require a statement
by the lessor disclosing the presence of known lead-based paint and /or lead-based
paint hazards in the housing being leased or indicating no knowledge of the
presence of lead-based paint and/or lead-based paint hazards. The lessor shall
also disclose any additional information available concerning the known lead-
based paint and/or lead-based paint hazards, such as the basis for the
determination that lead-based paint and/or lead-based paint hazards exist in the
housing, the location of the lead-based paint and or lead-based paint hazards, and
the condition of the painted surfaces. The regulation also requires the signatures
of the lessors, agents, and lessees certifying to the accuracy of their statements to
the best of their knowledge, along with the dates of signature. The certification is
intended to protect the assisted families from the hazards associated with lead-
based paint.
We are encouraged by the Authority’s statement that it is developing and
implementing additional procedures to ensure that all tenant files contain lead-
based paint certifications signed and dated by the tenant, but we point out that the
Authority needs to ensure that all involved parties sign and date the certifications
as required.
Comment 11 HUD regulations at 24 CFR 982.158 state that the Public Housing Authority must
maintain complete and accurate accounts and records for the program in
accordance with HUD requirements, in a manner that permits a speedy and
effective audit. The records must be in the form required by HUD, and include
27
copies of executed leases and HAP contracts, lead-based paint records as required
by part 35, subpart B of this title, records to document the basis for determining
rent reasonableness and other records specified by HUD. The Authority did not
properly maintain documentation to support housing assistance payments in
accordance with HUD regulations and its own administrative plan. For example,
as noted in comment 8 above, the Authority’s administrative plan required the
Request for Tenancy Approval to be signed by both the tenant and owner (see
Comment 12). Further, the administrative plan reiterates HUD regulations and
requires the Authority to execute HAP contracts no later than 60 calendar days
from the beginning of the lease term. Since HAP contracts were frequently not
dated, the Authority could not demonstrate its compliance with this requirement
(see Comment 4). As stated in the report, the Authority needs to improve its
administration of the program.
Comment 12 Ineligible costs are expenditures of HUD funds that are not allowable by law;
contract; or federal, state or local policies or regulations. As explained in our
comments that follow, the Authority did not comply with HUD regulations and as
a result it made ineligible expenditures despite the fact that the tenants met
eligibility requirements.
Comment 13 Contrary to the Authority’s assertion, for tenant 12, although the lease was signed
but not dated by the owner, it was signed and dated by the tenant 47 days after the
beginning of the lease term. For tenant 20, the owner and the tenant signed and
dated the lease 65 days after the beginning of the lease term. The final report
correctly shows 10 files had this deficiency. We revised the report to show these
deficiencies as documentation issues.
We are encouraged by the Authority’s statement that it is developing and
implementing additional quality assurance procedures to ensure that all leases are
signed prior to the beginning of the lease term.
Comment 14 The draft report indicated that in five files, not six, as stated by the Authority, it
did not execute the HAP contract within 60 days from the beginning of the lease
term. For tenant 20, although the HAP contract was signed but not dated by the
Authority, it was signed and dated by the owner 65 days after the beginning of the
term of the lease term. To be conservative, we revised the results for tenant 14 to
show that $9,404 are unsupported costs because the date stamp on the back of the
HAP contract is an indicator and not definitive to demonstrate when the contract
was executed.
We are encouraged by the Authority’s statement that it is developing and
implementing additional quality assurance procedures to ensure that all HAP
contracts are executed within the required time period.
Comment 15 HUD regulations at 24 CFR 982.305 (c) state that the Public Housing Authority
may not pay any housing assistance payment to the owner until the HAP contract
has been executed. However, to be conservative, we revised the report and
28
removed the results for those tenants for which the payment was processed over a
weekend.
We are encouraged by the Authority’s statement that it is developing and
implementing additional quality assurance procedures to ensure that HAP
payments are not made before the effective date of the HAP contract.
Comment 16 We revised the report to show that the amount for tenant 8 is $3,339.
We are encouraged by the Authority’s statement that it is developing and
implementing additional quality assurance procedures to ensure that HAP and
utility allowance calculation errors are minimized.
Comment 17 The Authority did not provide an explanation or documentation to support its
disagreement with our determination that the tenants were underpaid. However,
we revised the results for tenant 13 from $270 to $450 in the final report because
the underpayments occurred for at least 10 months rather than the six months
reported in the draft report.
Comment 18 The correct total of underpayments identified by the audit is $1,708 as revised
(see Comment 17).
29
Appendix C
CRITERIA
24 CFR [Code of Federal Regulations] 5.901
(a) General criminal records searches. This subpart applies to criminal conviction background
checks by public housing authorities that administer the Section 8 and public housing programs
when they obtain criminal conviction records, under the authority of section 6(q) of the 1937 Act
(42 U.S.C. [United States Code] 1437d(q)), from a law enforcement agency to prevent admission
of criminals to public housing and Section 8 housing and to assist in lease enforcement and
eviction.
24 CFR [Code of Federal Regulations] 35.92
(b)(1) A Lead Warning Statement with the following language: Housing built before 1978 may
contain lead-based paint. Lead from paint, paint chips, and dust can pose health hazards if not
managed properly. Lead exposure is especially harmful to young children and pregnant women.
Before renting pre-1978 housing, lessors must disclose the presence of lead-based paint and/or
lead-based paint hazards in the dwelling.
(2) A statement by the lessor disclosing the presence of known lead-based paint and/or lead-
based paint hazards in the target housing being leased or indicating no knowledge of the
presence of lead-based paint and/or lead-based paint hazards. The lessor shall also disclose any
additional information available concerning the known lead-based paint and/or lead-based paint
hazards, such as the basis for the determination that lead-based paint and/or lead-based paint
hazards exist in the housing, the location of the lead-based paint and/or lead-based paint hazards,
and the condition of the painted surfaces.
(3) A list of any records or reports available to the lessor pertaining to lead-based paint and/or
lead-based paint hazards in the housing that have been provided to the lessee. If no such records
or reports are available, the lessor shall so indicate.
(4) A statement by the lessee affirming receipt of the information set out in paragraphs (b)(2) and
(b)(3) of this section and the lead hazard information pamphlet required under 15 U.S.C. 2696.
(5) When any agent is involved in the transaction to lease target housing on behalf of the lessor,
a statement that:
(i) The agent has informed the lessor of the lessor’s obligations under 42 U.S.C. 4852d; and
(ii) The agent is aware of his/her duty to ensure compliance with the requirements of this
subpart.
(6) The signatures of the lessors, agents, and lessees certifying to the accuracy of their statements
to the best of their knowledge, along with the dates of signature.
(c) Retention of certification and acknowledgment information.
(1) The seller, and any agent, shall retain a copy of the completed attachment required under
paragraph (a) of this section for no less than 3 years from the completion date of the sale. The
lessor, and any agent, shall retain a copy of the completed attachment or lease contract
containing the information required under paragraph (b) of this section for no less than 3 years
from the commencement of the leasing period.
30
(2) This recordkeeping requirement is not intended to place any limitations on civil suits under
the Act, or to otherwise affect a lessee’s or purchaser’s rights under the civil penalty provisions
of 42 U.S.C. 4852d(b)(3).
(d) The seller, lessor, or agent shall not be responsible for the failure of a purchaser’s or lessee’s
legal representative (where such representative receives all compensation from the purchaser or
lessee) to transmit disclosure materials to the purchaser or lessee, provided that all required
parties have completed and signed the necessary certification and acknowledgment language
required under paragraphs (a) and (b) of this section.
24 CFR [Code of Federal Regulations] 982.158, Program Accounts and Records
(a) The Public Housing Authority must maintain complete and accurate accounts and other
records for the program in accordance with HUD requirements, in a manner that permits a
speedy and effective audit. The records must be in the form required by HUD, including
requirements governing computerized or electronic forms of record-keeping. The Public
Housing Authority must comply with the financial reporting requirements in Code of Federal
Regulations 24 part 5, subpart H.
(e) During the term of each assisted lease, and for at least three years thereafter, the Public
Housing Authority must keep:
(1) A copy of the executed lease;
(2) The Housing Assistance Payment contract; and
(3) The application from the family.
(f) The Public Housing Authority must keep the following records for at least three years:
(1) Records that provide income, racial, ethnic, gender, and disability status data on program
applicants and participants;
(4) Unit inspection reports;
(5) Lead-based paint records as required by part 35, subpart B of this title.
(7) Records to document the basis for Public Housing Authority determination that rent to
owner is a reasonable rent (initially and during the term of a Housing Assistance Payment
contract); and
(8) Other records specified by HUD.
24 CFR [Code of Federal Regulations] 982.305, Public Housing Authority Approval of
Assisted Tenancy
(b) Actions before lease term.
(1) All of the following must always be completed before the beginning of the initial term of
the lease for a unit:
(ii) The landlord and the tenant have executed the lease (including the HUD-prescribed
tenancy addendum, and the lead-based paint disclosure information as required in
35.92(b) of this title).
(c) When Housing Assistance Payment contract is executed.
(2) The Public Housing Authority may not pay any housing assistance payment to the owner
until the Housing Assistance Payment contract has been executed.
(4) Any Housing Assistance Payment contract executed after the 60 day period is void, and
the Public Housing Authority may not pay any housing assistance payment to the owner.
31
24 CFR [Code of Federal Regulations] 982.311, When Assistance Is Paid
(a) Payments under HAP [housing assistance payments] contract. Housing assistance payments
are paid to the owner in accordance with the terms of the HAP contract. Housing assistance
payments may only be paid to the owner during the lease term, and while the family is residing
in the unit.
24 CFR [Code of Federal Regulations] 982.507, Rent to Owner: Reasonable Rent
(a) Public Housing Authority Determination.
(1) The Public Housing Authority may not approve a lease until the Public Housing
Authority determines that the initial rent to owner is a reasonable rent.
(2) The Public Housing Authority must re-determine the reasonable rent:
(i) Before any increase in the rent to owner;
(4) At all times during the assisted tenancy, the rent to owner may not exceed the reasonable
rent as most recently determined or redetermined by the Public Housing Authority.
24 CFR [Code of Federal Regulations] 982.516, Family Income and Composition: Regular
and Interim Examinations
(a) Public Housing Authority responsibility for reexamination and verification.
(1) The Public Housing Authority must conduct a reexamination of family income and
composition at least annually.
(2) The Public Housing Authority must obtain and document in the tenant file third party
verification of the following factors, or must document in the tenant file why third party
verification was not available:
(i) Reported family annual income;
(ii) The value of assets;
(iii) Expenses related to deductions from annual income; and
(iv) Other factors that affect the determination of adjusted income.
(g) Execution of release and consent.
(1) As a condition of admission to or continued assistance under the program, the Public
Housing Authority shall require the family head, and such other family members as the
Public Housing Authority designates, to execute a HUD-approved release and consent form
(including any release and consent as required under Sec. 5.230 of this title) authorizing any
depository or private source of income, or any Federal, State or local agency, to furnish or
release to the Public Housing Authority or HUD such information as the Public Housing
Authority or HUD determines to be necessary.
(2) The Public Housing Authority and HUD must limit the use or disclosure of information
obtained from a family or from another source pursuant to this release and consent to
purposes directly in connection with administration of the program.
HUD’s Section 8 Housing Choice Voucher Program Guidebook, 7420.10G, Chapter 5,
Section 5.2, Eligibility Requirements
There are four factors which affect eligibility:
32
• Family definition. Only applicants who meet a PHA’s [public housing agency] definition
of family are eligible.
• Income limits. The household’s annual income may not exceed the applicable income
limit as established by HUD.
• Citizenship status. The applicant must meet the documentation requirements of
citizenship or eligible immigration status.
• Eviction for drug-related criminal activity. Persons evicted from public housing or any
Section 8 program for drug-related criminal activity are ineligible for assistance for at
least three years from the date of the eviction.
The PHA’s administrative plan must contain procedures for determining eligibility and denial of
assistance.
Citizenship Status
Limits on Assistance to Non-Citizens
Eligibility for federal housing assistance is limited to U.S. citizens and applicants who have
eligible immigration status. Eligible immigrants are persons who qualify for one of the
immigrant categories in Table 5-1. Persons claiming eligible immigration status must present
appropriate immigration documents, which must be verified by the PHA through the
Immigration and Naturalization Service (INS).
Every applicant household for (and participant in) the housing choice voucher program must sign
a certification for every household member either claiming status as:
• A U.S. citizen, or
• An eligible alien, or
• Stating the individual’s choice not to claim eligible status and acknowledge ineligibility.
The Housing Authority of the City of Pittsburgh’s Housing Choice Voucher Program
Administrative Plan
The Authority’s Section 8 administrative plan establishes its policies and procedures used to
administer the Section 8 Housing Choice Voucher program in accordance with HUD
requirements.
33
Appendix D
RESULTS OF TENANT FILE REVIEWS
HAP contract present,
(Authorization for the
contract was executed
Lease present, signed,
Criminal background
Information/ Privacy
third- party evidence
HAP paid after HAP
assistance payments∗
Rent reasonableness
the term of the lease
Request for tenancy
Lease signed before
Housing assistance
executed within 60
Income verified to
Ineligible housing
signed, and dated
HUD Form 9886
days of the lease
reexaminations
determinations
HAP contract
payments not
Lead- based
certification
Act Notice)
supported*
Release of
and dated
approval
Interim
Tenant
checks
1 X X $6,860
2 X X X
3 X X
4 X X X $6,325
5 X X $408
6 X X X
8 XX XX
9 X X X X
10 X X
11 XX X X
12 X X X X
13 XX XX XX $6,655
14 X X $9,404
15 XX X $1,638
16 X X $8,241
17 X X X $9,954
18 XX X XX X $2,262
19 XX X X
20 XX X X X X $1,248 $8,790
21 X
22 X X X X X X $1,985
23 X X X X X $1,815
24 X X X
25 X X
26 X X X X X $2,015
28 X
29 X X X $2,015
30 X X X X $1,035
Totals 1 3 1 27 18 4 10 1 5 3 5 6 $12,180 $58,470
NOTE: An "X" identifies a deficiency in the file. More than one “X” represents multiple occurrences of the deficiency.
*
To avoid double counting, we did not report questioned costs both as ineligible payments and unsupported costs.
34
Appendix E
HOUSING ASSISTANCE PAYMENT ERRORS
Utility
allowance
Over- over- Under- Total
Tenant payments payments payments Total over- under-
number to landlord to tenant to landlord payments payments
01 $645 $645
03 $20 $120 $140
08 $3,339 $3,339
11 $1,140 $1,140
12 $128 $128
13 $450 $450
14 $72 $72
20 $120 $120
22 $40 $40
30 $445 $445
Totals $4,691 $120 $1,708 $4,811 $1,708
35
The Housing Authority of the City of Pittsburgh, Pennsylvania, Did Not Adequately Administer Its Housing Assistance Payments for Leased Housing
Published by the Department of Housing and Urban Development, Office of Inspector General on 2008-09-30.
Below is a raw (and likely hideous) rendition of the original report. (PDF)